Unless
there is a complete segregation of ownership and management, one should
not expect the professional managers play their due role

By
SHABBIR H. KAZMI
June 20 - 26, 2005

The overall development of any country, among other
factors, is directly dependent on the quality of its human resource.
Economic development is critically related to the level of informed
decision making, which cannot be achieved without producing
professionals in all the related disciplines. Pakistan had never been
able to invest in the basic or higher education due to financial
constraints. It is heartening to note that the present government is
trying to compensate for the past inadequacies. However, the objective
could not be achieved without taking a detailed account of the
prevailing realties, counting strengths and weaknesses and coming up
with a proactive approach.

It is necessary to reiterate the fact that
information is the most crucial aspect of today's world and the
objective of improving the quality of the life of masses is highly
dependent on utilization this information. Masses cannot have access
to the information unless knowing exactly what is required. Then comes
managing the available information and utilizing it to achieve the
desired objective of improving the quality of life.

Before going in further details that till a decade
back the government used to fix supporting price of cotton. However,
it was often fixed much below than the international prices . After
prolonged debate and resistance the government decided to allow the
market forces to determine domestic prices of cotton. The fact is that
now even a small grower first goes to an Internet cafe and asks the
operator to help him in finding international prices of cotton and
then visit the ginning factories to sell his stock. This practice has
helped in achieving stability in cotton prices as well enabling the
farmers to negotiate better price for their produce.

At the onset it is important to point out that
despite achieving independence in 1947, the policy makers have not
been able to come up with curriculum to suit the country's needs. The
worst fact being that they even cannot estimate the number of
professionals (doctors, engineers and business managers) the country
needs every year. This is evident from oversupply in certain
disciplines and acute shortage of qualified personnel in other fields.
Since it is not possible to review the all over education system in
the country, efforts have been made to review the system responsible
for preparing business managers.

According to some analysts two factors impeding the
growth of Pakistan's economy are lack of entrepreneurial skills and
professional management. The country produces hundreds of Bachelors
and Masters who only add to the lot of unemployed. The poor grooming
of ordinary graduates and rising demand for managers and executives
has forced the business community to employee MBAs. The MBAs may find
an immediate opening after graduation but very shortly realize that
they are no better than a dignified clerk.

The general complaint is that the business schools
operating in Pakistan produce professional managers, who can work
efficiently and effectively in multinational companies and local blue
chip corporate sector. However, no attention is being paid to groom
entrepreneurs. The critics say, "unless the professional business
managers are taught entrepreneurial skills their vision remains
myopic. Most of the graduates become good executives with the passage
of time but often lack entrepreneurial skills, the much needed trait
for achieving higher growth and diversification of business."

The demand for professional managers is growing at
a very fast pace. There are two reasons for this growth: 1)
government's effort to separate ownership from management and 2) the
growing realization in the private sector that the owners know very
little about the emerging technologies and have to hire professionals.
A very positive development is that the owners send their children to
business schools to attain new skills, be it information technology or
specialized skills for managing highly capital-intensive industrial
units.

Realizing the growing gap between demand and supply
of professional managers the government allowed establishment of
'Business Schools' in the private sector. The establishment of these
schools in such a large number provided an opportunity to a large
number of students to get admissions and also get a degree. However,
the disparity in quality of graduates started emerging very shortly.
This could only be attributed to two key factors: 1) acute shortage of
quality teaching staff and 2) following a curriculum that does not
meet the requirement of trade and industry. The owners/promoters of
these schools may have minted tons of money but the biggest losers
were the graduates from these schools. This forced the government to
intervene and the situation started improving. It is also evident that
while some of these schools have managed to create a niche market for
their graduates others are still struggling.

The performance of business schools can be gauged
on two parameters: 1) the salary offered to its fresh graduates and 2)
the respect they enjoy in the corporate sector. While most of the
schools follow similar, if not identical, curriculum, some also offer
specialized or tailor-made programs. By doing so, they have succeeded
in creating a niche market, which seems to be proliferating with the
passage of time. It is also believed that the prospective employers
have played a key role in the development of course outline and also
by arranging appropriate instructors.

It is believed that the quality of graduates is not
a key factor for ensuring timely employment for the outgoing
graduates. The good institutions follow multi-tier strategy, which
include closer interaction with the prospective employers, internship
programs, arrangements of seminars and conferences on contemporary
issues and above all a very proactive 'Placement Office'. Some of them
also have leading businessmen on their Board of Governors. To further
cement the relationship with the prospective employers they also
invite guest speakers from the corporate sector. The regular
interaction of students with the prospective employers bears fruit.
The graduates from such schools are often picked up by the employers
even before they get the formal degree. The interaction with business
community also helps in further improving the curriculum to suit the
needs of corporate sector.

The interaction of students, faculty and management
of these schools with employers also helps in making necessary changes
in the curriculum and teaching methodology. The first business school,
Institute of Business Administration, was established in Pakistan in
fifties through grant and support of USAID. Therefore, its curriculum
was also picked up from the leading American universities. It is
noticed that some of the newer institutes have committed the mistake
of adopting decades old curriculum. As against this the enterprising
institutions followed the same architecture but introduced disciplines
which meet the contemporary demand.

Reportedly there has often been conflicts among the
Saiths, the older breed of managers and the young professional
managers. According to a senior professional manager, "This is
not extraordinary or new. I faced the same attitude when I started my
career. Somehow the other owners do not wish to share their powers
with their employees, be it a proprietorship or a public limited
company. It is another thing that at times the owner has to depend on
the skills of an employee. It has been always at the back of their
minds that decision making is their sole prerogative. The positive
change is that with the involvement of younger generation the level of
resistance has come down. However, involvement in day-to-day
management still continues. Unless there is complete segregation of
ownership and management, one should not expect the professional
managers play their due role."

It may be of some interest to reproduce a quote
from one of previous cover stories on the business schools. An old
Saith had said, "I have built the empire by working hard and also
being 'miser', as they call me. My only regret is that the younger
generation does not realize that how difficult it is to earn a paisa.
Since it is not their (professional managers') money they pay less
attention to potential losses resulting from their adventurism. Some
of them disagree with the older generation only to prove that they
understand business dynamics better. It may be true I am not fully
conversant with computers and Internet but I do have better knowledge
of my own business."

According to some analysts, "The confrontation
comes due to lack of interaction between the business schools and the
business community. The common complaint is that business community of
Pakistan does fully support the business schools. It may not be a fact
but certainly an overwhelming perception. It is felt that business
community employs graduates from these schools but are reluctant to
help in the development of curriculum as well as offering scholarships
to the outstanding students."

The business schools are said to be charging very
high fees from the students. The prevailing situation creates problems
for poor but enterprising students. Such students cannot afford to
join these schools only because they do not have the resources. This
creates discrimination between haves and haves not. However, another
view is, "Globally higher education is also expensive and
Pakistanis have no reason to complain." However, they tend to
forget the reality which is, higher education is expensive but
scholarships, based on merit, are also available in abundance. This
offers an opportunity to haves not to work harder and avail the
opportunity.

A very important constituent of business schools is
the faculty and no one should try to undermine its importance. It is
also important to understand its composition, which is typically
classified as full time and part time. However, people often fail to
distinguish between 'visiting faculty' and 'part timer faculty'. With
the opening of a large number of business schools an acute shortage of
qualified and experienced faculty has became a serious issue. As a
makeshift arrangement a number of schools lured MBAs working for the
corporates to deliver lectures. However, it is not realized that
working for a MNC or a blue chip company and imparting education are
two different ballgames. The problem with hiring corporate employees
as faculty members is that they come for a limited time and their
interaction with students is minimal. The other issue is that they
demand a teaching/grading assistant, as they are often not willing to
grade the scripts. Lately, some of the business schools have realized
the importance of permanent faculty and raised its emoluments, which
now seems comparable with the remuneration being paid by the corporate
sector. This is helping in attracting quality faculty.

While some of the business schools have succeeded
in establishing their credentials and niche market, others are still
struggling. The government has granted charter for the establishment
of a large number of business schools. With the transfer of education
to private sector, their monitoring has become all the more important.
It is also necessary for the students and parents to find the
credentials of a school before making the decision.

For quite some time there has been an effort going
on to introduce self regulatory environment, which has not yielded
results. Now it has become imperative that the government takes the
lead and enforce a regulatory system. This may irritate those who do
not wish to follow good governance. However, in the larger interest of
nation and to recognize good players, introduction of accreditation
system is a must.